Households face paying a £14 annual “insurance premium against the risk of
blackouts”, under plans designed to encourage construction of up to 30 new
gas-fired power stations.

The Government’s gas strategy, published alongside the Autumn Statement, said that Britain could need up to 26 gigawatts of new gas power by 2030 to help keep the lights on but admitted new plants might not be built without subsidies.

As a result, ministers plan to offer energy companies payments to guarantee they can have gas power plants available when needed, through a so-called “capacity market”.

It will also offer payments for other kinds of power plants and for companies that can guarantee to cut power use when needed.

The plan is likely to result in an increase of bills of around £14 a year, which the Government said was “effectively an insurance premium against the risk of blackouts”.

George Osborne said that the strategy would “ensure we make the best use of lower cost gas power”.